Joby Aviation stock price has remained in a deep bear market, falling by over 20% from its highest level this year. It crashed to a low of $7.8 on Tuesday and is hovering near its lowest level since December 24. So, is Joby a good buy ahead of its earnings on Friday?
Joby Aviation stock price analysis
The weekly chart shows that the JOBY share price has pulled back in the past few weeks. It peaked at $10.70 and then retreated to the current $8, a notable factor since this price was the highest swing in July last year. This makes it a break-and-retest chart pattern.
The stock has formed a bullish pennant pattern, a popular continuation sign. This pattern comprises of a vertical line and a symmetrical triangle, and often leads to a strong rebound.
Joby Aviation stock has moved above the 25-week Exponential Moving Average (EMA) and the ascending trendline that connects the lowest swings since January 2023. It has moved slightly below the 38.2% Fibonacci Retracement point.
Therefore, the stock will likely bounce back as bulls target the YTD high of $10.70, which is about 36% above the current level. A break above that level will point to more gains, possibly to a high of $12, its highest swing in June 2023.
However, a drop below the support at $7.20, the 25-week moving average will point to more downside, with the next point to watch being at $5, coinciding with the ascending trendline.
JOBY chart by TradingView
Potential catalysts for Joby Aviation
Joby Aviation stock has numerous catalysts that may push it higher in the coming months. The company has made a lot of progress on its development, meaning that it will start its commercialization later this year. That will cap a long period of development for its electric aircraft, where it has received numerous key FAA approvals.
Joby Aviation has also inked customer deals with some of the biggest players in the industry. For example, it has a relationship with the Department of Defense (DoD), which has made some initial orders. Other top customers are the United Arab Emirates (UAE), Mukamalah Aviation, and Delta.
The company has also raised capital, meaning that dilution will likely be avoided in the near term. It received a $500 million funding from Toyota in 2024, bringing its total cash on its balance sheet to $1.4 billion. Toyota has now invested over $760 million in Joby, an investment that mirror’s Stellantis’ funding of Archer Aviation.
Therefore, the upcoming financial results will provide more color about its business and the progress it has made.
Still, Joby Aviation and other eVTOL companies have several risks ahead. The first one is that this is a novel industry that has not been tried before, meaning that the current projections are mostly hypothetical.
Further, the company will take longer to break even. We have seen this in the electric vehicle industry where companies like Rivian and Lucid take a long time to break even. This means that future dilution is a risk since the company is still losing millions each quarter. It had a net loss of over $120 million in the third quarter.
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